WASHINGTON — With GOP tax legislation signed into law, the chatter at kitchen tables and coffee shops in Connecticut is now whose taxes go up and whose go down.

For the average well-to-do homeowner in Fairfield, Westport or Darien, the impending loss next year of state-and-local tax deductions will mean higher federal income taxes.

In the high-property-tax cities of Bridgeport, Danbury and New Haven, the likelihood of higher taxes is even greater.

“For states like Connecticut with high taxes, the specific impacts are quite negative, I believe,” said Jayme Stevenson, the Republican first selectman of Darien. “Given the fiscal crisis in the state, this tax bill will make it more difficult in Connecticut and Darien.”

As is the case in neighboring New York and other high-tax, high-expenditure states, Connecticut has been heavily dependent on the state and local tax (SALT) deductions that enabled residents to deduct property, sales and state income-tax payments.

Under the GOP law ratified Friday by President Donald Trump, SALT deductions in any combination are capped at $10,000 — a paltry amount in a state where the average SALT deduction claimed in 2015 was $19,655.

The SALT amounts are even more in high-end real estate areas like Darien, where the property tax averages $18,400 and one real estate trust pays $340,000 for substantial waterfront acreage.

But there’s no one-size-fits all to the calculus of who pays more and who pays less, tax experts say.

More Information

Local tax burdens

The average tax bills in 2015.

Only amounts over $10,000 will be fully deductible for the 2018 tax year.

Fairfield - $35,696

Easton - $32,586

Monroe - $18,636

Trumbull - $18,376

Oxford - $14,348

Milford - $14,060

Shelton - $12,885

Black Rock, Bridgeport - $12,337

Seymour - $12,265

Ansonia - $9,774

Derby - $9,724

Bridgeport, North End - $9,197

Taxing calculations

The non-partisan Tax Policy Center on Friday posted a calculator to help taxpayers figure out their liability under the new law, compared to what it replaced.

The calculator, at http://tpc-tax-calculator.urban.org/, suggests taxpayers in most categories initially would see some reduced tax liability, with the bang-for-buck rising with the income scale. It does not include SALT deductions but it does incorporate the decision many taxpayers in the mid-range will need to make: To itemize or not to itemize.

Claiming even the reduced SALT deduction still requires itemization, whereas the doubling of the standard deduction to $24,000 per couple may lead many in the middle-of-the-income spectrum to abandon it.

The calculator shows a married couple with two children at home and an annual income of $82,500 will see their tax liability drop to $14,810 from $17,126.

The same family with an annual income of $151,200, goes to $37,838 from a liability of $40,996. And if the family’s annual income is $880,800, it drops to $283,404 from $307,038.

“Details matter a lot,”’ said Kim Rueben, a senior fellow at the Tax Policy Center.

Loss of the SALT deduction may sting Connecticut taxpayers but the ultimate choice of whether or not to itemize “depends on what else going on in your life,” she said.

In rough terms, the answer may lie in whether the taxpayer has $14,000 or more in itemized deductions in addition to the $10,000 in SALT deductions. That $14,000-plus could come from mortgage interest, charitable giving or high out-of-pocket medical expenses.

Because $24,000 per couple is the new threshold for not itemizing, anyone with more than $24,000 in deductions may well benefit from continuing to itemize.

Another key issue, Rueben said, is the Alternative Minimum Tax (AMT).

Many in Connecticut with high SALT deductions were hit with AMT, which prevented those in the near-rich bracket from avoiding taxes through super-high deductions.

Under the new law, the AMT exemption doesn’t phase out until above $1 million, compared to the previous level of $164,000. So for the well-heeled, this is potentially good news.

Although property tax bills are high in Darien, Fairfield, Westport, Greenwich and other suburban jurisdictions, the region’s larger cities such as Bridgeport, Danbury and New Haven actually have higher tax rates.

For instance, David Walker, former comptroller general of the U.S. who is running for governor, pays about $35,000 in property taxes on his home in Bridgeport’s Black Rock.

And even though property taxes are high in Connecticut, they’re higher in N.Y. metropolitan area suburbs including Westchester and Nassau Counties.

“In a weird way, Connecticut becomes more competitive,”’ said Joseph McGee of the Business Council of Fairfield County. “So if you need to live and work in the tristate area, Connecticut’s marketplace appeal is enhanced, even if many of us are paying more with this tax law.’’

1 percent winners

Brian Newman, a CPA who is a partner in the firm of Cohn Reznick, said concerned clients are flooding his office with calls.

“Each client will be affected in completely different ways,” said Newman, a partner in charge of New England for the national firm. “It depends on the business you’re in and the state where you make money. There is no cookie cutter.”

Some clients will do better if they pay state taxes that are normally due Jan.15, before the end of the year.

“Everyone will get the benefit of lower rates,” Newman said, referring to consolidation of brackets with the top one dropping 2.5 percentage points to 37 percent.

The effect on individuals ultimately depends on deductions, he said. “That $10,000 cap on (state and local) tax deductions can potentially hurt a lot of people.”

Rep. Jim Himes, who represents a broad spectrum of the Connecticut income scale, from Greenwich to Bridgeport, said the top one percent benefit from elements of the law such as raising the estate tax threshold from $11 million to $22 million for couples.

“If you have $22 million to give to your kids, holy smokes, that’s a huge Christmas present,” he said.

Shelton Mayor Mark Lauretti, a Republican gubernatorial hopeful whose city has some of the lowest taxes in the state, said it’s too early to figure out what the new tax laws may do.

“Our city is diverse, so it will affect people differently,” he said. “We have some big businesses in Shelton, so I know it favors employers like Pitney Bowes, Hubbell and Sikorsky.”

He added: “I think the silver lining in the tax breaks for big business is that they will reinvest. Retention and expansion is important. Will this help people on the lower end? No. But if it can help business, it can in turn around the state economy.”

‘Paying the price’

Others were not so sanguine about the law’s impact on job growth and higher wages.

“The answer to workers’ compensation is not tax policy, it’s compensation policy,” said McGee. “The digital revenue has so increased worker productivity that we don’t need as many workers. So we so don’t have to pay what we used to pay.”

New Haven Mayor Toni N. Harp, a Democrat, also was less optimistic.

“In New Haven there is ample, daily evidence to underscore how municipal services and charitable organizations depend upon reliable revenue sources,” Harp said. “This new tax law, which will increase the federal deficit and eliminate many personal income tax deductions, undermines the prospects for that essential revenue."

Another gubernatorial hopeful, Hartford Mayor Luke Bronin, was even more succinct.

“The Republican tax bill hits Connecticut residents awfully hard,” he said Friday. “And the country as a whole and Connecticut in particular are going to be paying the price for this irresponsible bill for a long time to come.”

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